2025 Tennessee reassessment: Commercial real estate in major markets at risk of large property tax increases

Tax year 2025 is set to have a major impact for real estate property tax valuation in Tennessee. Three of the four largest counties, Davidson, Hamilton, and Shelby are set to undergo their state-mandated reassessment for the first time since 2021.

The 2021 reassessment saw huge increases across the board for most properties, but certain property types, like hotels and retail, saw only minimal increases due to market data that was highly impacted by the COVID-19 Pandemic. This ultimately resulted in a decrease in their overall tax burden as Tennessee is a revenue neutral state that decreases tax rates in reassessment years. For the 2025 reassessment, jurisdictions are going to rely on market data up to Dec. 31, 2024, which has seen the return of historical hotel occupancy/average daily rates (ADR). With continued retail strength in certain submarkets and the Fed lowering interest rates, we expect drastic increases for all property types in these counties this go around. Owners and investors in office buildings may see relief in certain submarkets, as those remain the only property subtype that has struggled to revive in a post-pandemic marketplace.

We highly recommend Tennessee commercial real estate owners and investors partner with an experienced property tax team ahead of the reassessment notices being released in Spring 2025. With some appeal windows being as small as 30 days after mailing of value notices, a trusted partner advocating on your behalf is imperative in navigating the deadlines and tax laws associated with the upcoming reassessment. Please see below for a summary of anticipated increases as well as a timeline for when notices/appeal deadlines are set to take place:

2025 Tennessee property reassessment dates and deadlines